The Chairman of the National Housing Corporation (NHC), Timothy Mangal, has declared that the corporation is insolvent.
Mangal told a news conference today that the NHC board had inherited a “dire” situation when it took office in July, 2016.
He noted that the law requires the NHC to present audited financial statements to parliament every year but the last audited statement from the corporation was presented in 2011.
“For the last five years there have been absolutely no audited statements and it is because the Auditors felt that giving an opinion would render the corporation insolvent and a decision would have to be taken maybe to wind down and close down this corporation,” Mangal said.
He said the new board had found that by virtue of the NHC act number 6 of 2001, it is mandatory for the agency to provide low and medium income homes for Saint Lucians.
However Mangal stated that in the last five years there have been no projects.
“The last project done by the NHC was the Marigot Housing Development project and that was in the year 2007 and I think it was completed around 2011,” the corporation Chairman revealed.
He observed that there was recurrent expenditure in terms of paying staff and meeting other expenses but nothing was being sold.
According to Mangal, things were so bad that the only way the corporation could have obtained money to pay for its recurrent expenditure was by selling its fixed assets such as land in order to pay expenses including salaries, rent and electricity bills.
The Chairman told today’s news conference that such a situation is very bad and has to be addressed.
He explained that as a result of the situation the previous government felt powerless to undertake projects on its own and as a result contacted third parties and prepared a number of agreements with foreign investors.
“The result is a number of failed developments – a number of failed projects,” Mangal observed.
He recalled that Housing Minister, Guy Joseph, has spoken about a project in the Balenbouche area.
“That particular one is a classic because you find that there is that parcel of land with over 200 lots that were prepared and developed by the NHC under the United Workers Party government then,” Mangal said.
He noted that a local contractor was engaged to provide the development at his cost, including putting in the infrastructure and financing it.
Mangal said once the lots were sold, the contractor would have been reimbursed.
The Chairman said with the contractor having been engaged, an agreement was signed with a foreign company, Bau Panel, giving the company fifty-one percent shares in the land at River Doree with the NHC retaining forty-nine percent.
He said the lands which belonged to the NHC were transferred in 2012 in the name of NHC Bau without an alien landholding license.
Mangal said the local contractor took NHB Bau to court and an order was placed on the property preventing the NHC from developing the lands until the matter is settled.
“There was judgement in the sum of five million, six hundred and something dollars in favour of that local contractor plus interest at a rate of over 871 dollars per day being added on,” he revealed, adding that to date the sum has grown to over seven million dollars.